Thursday, September 1, 2016

September 1, 2016

Hillary Clinton Channels Republican Foreign Policy in Speech to Veterans
In an anticipated speech to the American Legion in Cincinnati, Ohio, Hillary Clinton continued to strike a hawkish tone on US foreign policy. This was not unexpected, but it should be depressing. On the whole, it is safe to say that Clinton is positioned to the right of Donald Trump on matters of war and peace.

If you care about US foreign policy, that's bad news. Between the two major party candidates, we effectively have a choice between a candidate in Clinton who is predictably pro-war and a candidate in Trump who is not predictable at all, on everything except Russia (which he is thankfully decent on most of the time).

So what exactly did she say? Well, it involved some cringe-worthy nationalism that used to (and still should) make folks on the left squirm. Like this gem:

We are an exceptional nation because we are an indispensable nation. In fact, we are the indispensable nation.

Got that? We're the best country in the world, and not only that, the world needs us. At this point in history, however, one wonders whether the world feels the same way about us...

The speech also involved some completely disingenuous rhetoric for good measure:

We can't cozy up to dictators.

Apparently a swipe at Trump, this is actually a much better attack on Clinton herself. As one of many examples to choose from, she once famously referred to the (now former) dictator of Egypt and his wife as "friends of my family".

In related news on the campaign trail, Donald Trump gave a major speech on immigration. Some were expecting a softening of his previous proposals, but that's not what they got.

Instead, Trump stayed firm on the idea that amnesty would not be granted and the "beautiful" wall will go up. The only real nuance was added by omission. Trump reiterated his pledge to deport illegal immigrants who happen to be criminals (I.e. broke laws other than immigration ones), but he did not spell out his plan for dealing with the remaining undocumented immigrants, estimated to be around 11 million.

The hardline conservative position on the matter is to deport all of them, but this is mistaken on several levels. First, it's clearly wrong from an ethical perspective. Illegal immigration, as such, is a perfect example of a victimless crime. The harm caused by someone from Mexico moving to Texas is no different than a California resident moving to Portland, where I live. In both cases, the harm is zero. It's possible they could receive more government benefits than they pay in taxes, but if you are concerned about that, the solution lies in reducing the welfare state not deporting immigrants. Similarly, it's possible some undocumented immigrants may steal or commit violent acts. But these things are already illegal--and again, problems that are in no way uniquely caused by immigrants.

Moreover, even if one rejects the moral argument, deportation is so obviously impractical that it's odd we even discuss it. If the undocumented immigrants made up a country, it would be roughly 1/3 the population of Iraq. But instead of trying to simply occupy it, the goal of a mass deportation plan would involve rounding up every single one of them, presumably against their will, and transporting them elsewhere. The expenses associated with such a program are difficult to imagine. More importantly, the expansion of government police and surveillance powers needed to implement such a program would surely erode the liberties of all Americans--not just the immigrants being targeted.

In spite of these obvious flaws, however, it appears Trump and the media are content with pretending this is a real policy consideration. Fortunately, the rest of us know better. No matter what he says, Trump isn't going to deport 11 million immigrants, because frankly, there's virtually no way he could pull it off even if he wanted to.

For more on this story, check out this take from CNN, which offers a reasonably fair summary of Trump's speech as well as his recent visit with Mexican President Peña Nieto. Happily, the latter event ultimately proved to be oddly civil and uneventful.

Large Container Shipping Company Declares Bankruptcy

In a move that is likely to have major ripple effects, the international container shipping company Hanjin Shipping filed for bankruptcy this week. According to Zero Hedge, this is the largest bankruptcy for a container shipping company in history.

The immediate fallout is likely to be substantial, as the bankruptcy filing process is likely to disrupt shipments that were in process. This occurs because ports may not allow them to dock if they are unsure Hanjin ships will still be able to pay fees.

In the slightly longer term, the bankruptcy is likely to make a substantial dent in the balance sheets of the banks that lent to it, given the size of the company. The exact magnitude and distribution of this cost will be evident as the bankruptcy process proceeds.

Finally, perhaps the most important aspect of this story is what it says about the state of the global economy. The profits of the container shipping industry rise and fall with the global economy since they are the key intermediary for international trade. If the economy is doing well, more goods are shipped, and the container shipping industry performs well. When times are bad, the container shippers are among the hardest hit.

It is possible that Hanjin is just a one-off occurrence, and its bankruptcy stems from poor management. However, it seems more likely that their failure is further evidence that the global economy is very weak, even if Janet Yellen and the Fed would like to protest otherwise.